This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, click the "Reprints" link at the top of any article.

Storm’s Record Flooding Lands Blackout Blow

Millions are without power in the wake of Hurricane Sandy.

Record tides from a wintry super storm combined with hours of pounding wind and rain to deal an unprecedented blow to the U.S Northeast’s power grid, flooding substations and shutting New York City’s financial district.

By nightfall, Consolidated Edison Inc., New York City’s utility, had killed electricity in parts of downtown Manhattan and Brooklyn as seawater encroached on crucial power equipment, warning more cuts may be coming. Crews in Connecticut threw up a dike around an electrical substation serving downtown Stamford and stood ready to shut down four others should floodwaters rise by the forecast 11 feet.

“The last time we saw this threat was never,” Connecticut Governor Dan Malloy said at a press conference yesterday, warning the worst seawater flooding in 70 years could have tides lapping at the base of at least one inland dam.

As of 8 p.m. in New York yesterday, the storm had knocked out power to some 3.6 million homes and businesses, according to the U.S. Energy Department. That figure may increase overnight.

Power blackouts that may eventually affect as many as 10 million people in the region for as long as 10 days left homes in the dark, closed the stock market, and disrupted operations at refineries, pipelines and power plants. Damaged power lines, substations and other infrastructure will contribute to the $20 billion in total storm costs estimated by Eqecat Inc., a risk-management company in Oakland, California.

Sandy, the largest ever Atlantic tropical storm with winds stretching 1,100 miles (1,770 kilometers) from end to end, was forecast to lift seas as much as a record 13 feet (3.9 meters) as it came ashore at high tide last night near southern New Jersey. The surge in Connecticut and New York was expected to be twice as high as that of last year’s Hurricane Irene.

“The storm surge and the magnitude of the storm is what’s going to set this one apart,” said Samuel Brothwell, senior utilities analyst with Bloomberg Industries, in a telephone interview.

Sixteen deaths were reported in New Jersey, New York, Maryland, North Carolina, West Virginia, Pennsylvania and Connecticut, according to the Associated Press. Some of the victims were killed by falling trees; at least one death was attributed to the storm in Canada. The storm was blamed for 69 deaths in the Caribbean, the AP said.

As New York and Connecticut evacuated hundreds of thousands of residents from coastal areas yesterday, United Illuminating Co. said it would shut down its three substations, cutting off power to thousands to prevent equipment damage from flooding that would take weeks to repair.

Extended Repairs

Once floodwaters recede, perhaps today, workers may need a week to clean and repair the flooded stations before power can be restored, Brothwell said.

Con Edison shut down power to parts of downtown Manhattan, including Wall Street and the nation’s financial nerve center, as a 14 foot storm surge in the area, boosted by high tide, sent saltwater pouring into its underground power network.

“That is unprecedented,” John Miksad, the senior vice president for utility operations, said yesterday at a press conference. “We came close during Hurricane Irene but aborted that action.”

About 670,000 customers in New York were without power as of 11:15 p.m. on Oct. 29 local time after an explosion at the company’s 14th Street substation and two substations in Manhattan and one in Brooklyn were shut. It may take as long as a week to restore power to all customers, Miksad said.

Even with the precautionary shutdown, salt-water corrosion will complicate restoration, Matthew Cordaro, former chief operating officer for Long Island Lighting Co., said in a telephone interview. “It introduces a whole host of problems,” he said. “Contamination that has to be cleaned.”

Jersey Central Power & Light, a unit of FirstEnergy Corp., has used sandbags to reinforce 29 of its substations to prevent flooding, Ron Morano, a spokesman, said in a telephone interview. The company has brought in 1,400 line workers and 1,200 tree-cutters from Florida, Canada and nearby Midwestern states to restore power after Hurricane Sandy, the utility said in a statement. Customers could be without power for as long as 10 days, the utility said.

Public Service Electric & Gas Co., the utility for about three-quarters of New Jersey’s population, warned yesterday parts of its natural gas network may fail as water from flooded basements contaminates pipes.

“To restore service, you have to go into each and every house, check it, and then light the pilot,” Cordaro said. “It takes forever.”

‘Never Seen’

“We’ve never seen flood heights at the level being forecast,” said William J. Quinlan, senior vice president for emergency response at Northeast Utilities’ Connecticut Light & Power, speaking at a press conference in Hartford, Connecticut, yesterday. At an Oct. 26 press conference Quinlan assured the public the company is better prepared, “particularly in coordination and communication,” than it was last year when contending with Hurricane Irene and an early snowfall that cut power to millions along the East Coast.

Eastern U.S. utilities were condemned by customers, regulators and state lawmakers for their handling of those weather events. Damage was worsened for the storms, which each left more than 4 million customers without power for a week or longer, because utilities had neglected tree-trimming for years, regulators said.

For this storm, power companies have mustered thousands of line workers from across the country, beefed up call-center staffing and piled sandbags to protect electrical substations knocked out by flooding last year. Added spending on trimming tree limbs near power lines during the year also is expected to lessen the number of blackouts.

As many as 10 million people may lose power during the next few days, according to Johns Hopkins University’s Seth Guikema, an engineer who developed a computer model of the storm’s potential effects. He based his estimate on the expected strength and duration of winds and population density.

Power failures surged in southern New Jersey as the storm approached landfall, according to utility websites and company officials. FirstEnergy’s Jersey Central Power & Light reported 363,432 homes and businesses without power as of about 6 p.m. local. Public Service Electric & Gas, the state’s largest electric utility, reported about 156,000 customers blacked out.

Blackout Count

Connecticut Light reported 270,000 customers without power in Connecticut as of 6 p.m. local time. Consolidated Edison, owner of New York City’s utility, reported 230,000 customers blacked out in Manhattan, 73,000 in Staten Island and 140,000 in Brooklyn and Queens as of 11:15 p.m. yesterday.

“This will be the largest storm-related outage in our history,” Consolidated Edison’s Miksad said at a press conference yesterday.

Crews today began erecting a six-foot concrete dike around a substation serving downtown and south Stamford to protect it from a tidal surge expected around midnight, Quinlan said today at a news conference in Hartford.

It’s not practical to erect a dike around a substation in Branford, Connecticut, that is also at risk of flooding, Quinlan said. About 11,000 homes and businesses will lose power should that substation shut, and portable equipment may be brought in to compensate, he said.

The Edison Electric Institute, a Washington-based group that represents publicly traded utilities, warned that power failures from Sandy may be extended by high winds and flooding from the slow-moving storm that are expected to linger for two to three days. Electrical crews won’t be able to begin work until winds subside, flood waters recede and workers clear downed trees.

Copyright 2017 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Treasury & Risk

Treasury & Risk is an online publication and robust website designed to meet the information needs of finance, treasury, and risk management professionals. Our editorial content, delivered through multiple interactive channels, mixes strategic insights from thought leaders with in-depth analysis of best practices, original research projects, and case studies with corporate innovators.